How to Start an LLC in Washington D.C.: If you’re interested in setting up an LLC in DC, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. D.C.’s laws make it easy to establish your LLC in D.C. On this page, You’ll find all the steps that must be taken to ensure that your District of Columbia LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Washington D.C.
- After Starting Your Washington D.C. LLC
- Washington D.C. Foreign LLC
- District of Columbia LLC Formation Review
How to Start an LLC in Washington D.C.
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in D.C., mainly you have to file your Certificate of Formation with the State and pay a filing fee of $220. There are some more steps to follow to get your LLC established in Washington D.C.. The following steps explain everything you need to create your LLC in D.C. in 2022. Let’s get started!
Step 1: Decide a Name for Your Washington D.C. LLC
The very first step while forming an LLC in DC is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Washington D.C. LLC Naming Guidelines
There are a few specific requirements all the LLCs in Washington D.C. have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Washington D.C. can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LLC”, “L.L.C.”, “LC”, “L.C.”, and “Limited Company” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Washington D.C. State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|D.C. Business Entity Search – Online Name Search|
Name Reservation Form – PDF
D.C. LLC Name Search Guide – Instructions
Name Availability Standards – Guidelines
|Department of Consumer and Regulatory Affairs|
P.O. Box 92300
Washington D.C. 20090
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 120 days. To keep the name, you have to file a name reservation application and pay $50 to reserve your name with the Washington D.C. Secretary of State. For more information read our guide on Washington D.C. LLC Name Search.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Washington D.C. Secretary of State by submitting the Trade Name Certificate by mail or you can file it online along with the filing fee of $55.
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ZenBusiness gives you a business domain for free. It’s always a good idea to get a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. The same service also lets you set up your website, it’s an amazing deal for everyone.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Washington D.C.
The second step to forming a D.C. LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Washington D.C.. Hence, hiring a competent Washington D.C. Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Washington D.C. or has a physical street address. Their business address or the principal address should be in Washington D.C. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service for free for the first year (normally $100+/year).
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Washington D.C.. Compare them to check what is the best option for you. These same companies also provide standalone Washington D.C. registered agent services.
A person who is above 18 years of age and has a physical address in the state of Washington D.C. can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Washington D.C. and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Washington D.C.
Step 3: File Articles of Organization in Washington D.C.
The third and most important step in forming a Washington D.C. LLC is to file the Articles of Organization. This Washington D.C. Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $220 (online and by mail filing) and $320 (In-person drop-off) to file your formation certificate in Washington D.C.. (Read more on LLC cost in D.C.).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in D.C. LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Washington D.C. then you need to register as a Washington D.C. Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the Home Page. If you have subscribed to their official portal then Sign-in with your credentials. If you are not a subscriber yet, then you need to sign-up. Click the button below to sign-up on the portal. Read more about the Washington D.C. Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Washington D.C. LLC registration, then you can download form DLC-1. Read the form thoroughly, fill it out, and send it to the address mentioned below.
Mailing Address: Department of Consumer and Regulatory Affairs
P.O. Box 92300
Washington, D.C. 20090
Department of Consumer & Regulatory Affairs
1100 4th St. SW
Washington, D.C. 20024
Processing Time: It takes 5 to 7 business days to form an LLC in Washington D.C. if filed online. For filing by mail or in-person drop-off, it takes up to 3 weeks. You can speed up the process by paying additional expedited fees. However, the time can be different due to various factors.
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Step 4: Create Your Washington D.C. LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Washington D.C. LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Washington D.C., there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Washington D.C. LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
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Step 5: Filing a Washington D.C. LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Washington D.C. LLC requires following specific rules and regulations. On the other side, EIN for Washington D.C. foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Washington D.C. LLC. If you do it yourself it should take you a long time to properly understand and do all the steps. However, if you use a professional service it should take fewer hours and you always have live chat with expert support for any help you need.
After Starting Your Washington D.C. LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Washington D.C. business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Washington D.C. LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Washington D.C. LLC
Forming an LLC in Washington D.C. is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Washington D.C. LLC. LLCs have pass-through taxation. Hence, your Washington D.C. LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Washington D.C.,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee|
Certificate of Formation Fee
|$50 for 120 days|
In Washington, LLC name reservation is mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then a Name Reservation is needed. It can be registered by paying $50. Your LLC name will be reserved for 120 days. In some states, Name Reservation is not mandatory. Read more in our guide on LLC cost in Washington D.C.
Washington D.C. Foreign LLC
If you are interested in forming a Foreign LLC in Wahington D.C. then you need to file the Certificate of Foreign LLC to the Washington D.C. Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Washington D.C. SOS to form your foreign LLC in D.C. To know more in detail, check out our guide on Washington D.C. Foreign LLC.
Reasons to Start an LLC in the District of Columbia
Starting an LLC or any type of business in the District of Columbia, also known as Washington D.C., will be profitable for small businesses. With a capital investment of $3.36 billion, Washington D.C. has become one of the strongest economies in the United States. Being the capital city of the United States, D.C. offers many benefits to the businesses while they start their LLCs in Washington, D.C.
There are a series of tax benefits provided by the state government to the LLCs and new businesses. Read more on the D.C. classification of LLC tax. Following are the tax incentives one can expect –
- Job and employment opportunity benefit of $15,000 per year
- Tax benefits up to 10-years for using personal property to operate your LLCs in the state.
- First 5-years no corporate franchise tax is to be paid. From the 6th year, it would be a 6% annual rate.
- No tax on the real property for up to 5 years
Main Street Programs
In Washington D.C., there are some comprehensive programs which are called Main Street Programs. Under this program, traditional businesses are encouraged to revitalize again. Any new LLC registered in the state can enjoy these programs’ benefits if they are involved in D.C.’s traditional businesses. Georgetown, Eastern Market, North Capitol are some of the main street programs.
Loans and Grants for Small Businesses
Another reason for starting an LLC in Washington D.C. is the loans and grants the state government provided to the small businesses. Some of the important loans and grants programs are as follows –
- On the Job Training Program – Under this program, up to 75% of the total wage paid to the trainees can be reimbursed. Up to 1040 hours can be reimbursed under this program. Any new LLC can register under this OJT program if they have a size of a minimum of 100 employees.
- Anacostia Economic Development Corporation Program – The program, initiated by the AEDC, is administered for small businesses. Under this program, if the LLCs are involved in facade improvement projects, they can get up to 75% of the project’s total capital cost.
- The Community Development Financial Institute Program – This program is designed to improve financial institutions and structures in the state. The government has already spent $2.3 billion on this program. They provide loans and grants to small businesses to improve the financial structure of the state.
Best Businesses in the District of Columbia
If you want to form an LLC in the District Of Columbia, then you possibly have a business idea in your mind. If not, then you should look at the best options available below.
If you look around in the District of Columbia’s industries, many people are fond of using showcases and furniture made of old and recycled materials. If you think you have some extra innovative skills, you can enter the recycled materials business and make products out of waste. If people start liking what you are offering, you can charge according to your skillset and maybe more.
Environmental Friendly Product Business
District of Columbia’s residents keep extra care of the environment. Their love for the environment can be easily seen through the products they are using. That is why there is a huge scope of starting the business of environmentally friendly products. All you need to do is find the best products in the market and start the business.
The next business that is rising in the District of Columbia is subscription-related businesses. Every month there is a growth of 1% in subscription-based businesses. That is, there is a never-ending demand for subscription-based businesses. The subscription may be related to anything like food, accessories, etc. You have to select the niche in which you have the maximum interest and earn the maximum profit.
The next business that is gaining massive popularity in the District of Columbia is legal services. It is the capital state of the United Nations of America due to which the legal work in the state is at its peak and also the demand for a reliable legal services business. That is why to enter the business; you need to offer value to your legal clients and see how your business booms.
Here are businesses with some low investment
- Breweries business
- Nursery Farms
- Online advertisement business
District of Columbia LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in D.C. Click on the steps in this list to read the full detail.
- Name your Washington D.C. LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Washington D.C., it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like ZenBusiness to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in D.C. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Washington D.C. but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in District of Columbia
The first step is to file your Articles of Organization with the District of Columbia Department of Consumer and Regulatory Affairs. You can file online or in person – depending on your preference. Once you’ve filed the Articles, the approval process typically takes between three and four weeks. For an additional $10, you can file your documents expedited. If you’re a professional, you may want to get professional liability insurance to cover you from lawsuits. You should also consider buying business income insurance, which will reimburse you for lost income. Once you’ve formed your LLC, you’ll need to follow local laws and regulations, including paying taxes and getting a business license. Stay up to date on current legislation to ensure your business is protected.
After you’ve decided to incorporate your business in Washington, DC, you’ll need to file the Articles of Organization and RA-1 forms. You’ll need to choose an office address for the business, such as a street address. If you don’t have a street address, you can use your home address. In addition to filing the Articles of Organization, you’ll need to file a certificate of formation with the Department of Consumer and Regulatory Affairs (DCRA).
You’ll also need to apply for an Employer Identification Number, or EIN, for your business. This nine-digit number is your company’s official identity. It’s like your personal Social Security number for businesses. You’ll need it if you want to start collecting taxes, opening bank accounts, hiring employees, and more. The IRS will issue you this number after you’ve filed your LLC documents.
If you are a resident of Washington D.C., then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $220 (domestic LLC) and $220 (foreign LLC), LLC costs in Washington D.C. include $300 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year.
It takes 5-7 business days to get an LLC in D.C. if you file it online. For the mail filing, it takes 3 weeks to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend ZenBusiness which has impeccable turnaround time.
Every year all the LLCs have to submit a Biennial Report instead of Annual Report and pay $300 to the Washington D.C. Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Washington D.C. Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in District of Columbia at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.